SMSF, ANTIQUES & COLLECTABLES

Does your SMSF own artwork, antiques, coins or other collectables ?

Were any of these investments acquired before 1 July 2011? If yes, you need to be aware of the 1 July 2016 deadline that has passed for SMSF’s with “old collectables” (acquired before 1 July 2011).

The deadline relates to SMSF’s having to satisfy the five rules in respect of collectables which were purchased before 1 July 2011. These rules were introduced in July 2011, however a five-year transitional period was given before the rules applied to collectables which were acquired before July 2011.

SMSF’s had to comply with the five collectables’ rules since 1 July 2011 in respect of collectables acquired on or after 1 July 2011.

What is a collectable?

The definition of collectables includes:
ArtworkJewelleryAntiques
ArtefactsCoins, medallions or bank notesPostage stamps or first day coversRare folios, manuscripts or booksMemorabiliaWine or spiritsMotor vehiclesRecreational boatsMemberships of sporting or social clubs.

What is not a collectable?

Valuable metal (gold or silver) and gemstones are not collectables.

What are the 5 collectable rules?

Rule 1) A collectable cannot be leased to or used by a related party;

Rule 2) A collectable cannot be stored or displayed in a private residence of a related party;

Rule 3) The decisions of the trustee as to the storage of collectables must be documented and the written document kept:

Rule 4) Each collectable must be insured in the name of the SMSF and the insurance must be effected within seven days of 1 July 2016;

Rule 5) If a collectable is transferred to a related party, the value used for the transaction must be a value provided by a qualified independent valuer.

These rules were introduced in July 2011, however a five-year transitional period was given before the rules applied to collectables which were acquired before July 2011. The five-year transitional period ended on 1 July 2016.

Each individual trustee (or if a corporate trustee, the company itself) will be liable for penalties if any of the collectables rules are breached. Please contact Optima Partners if you require more information regarding your collectables.